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US Ports Experience Over 20% Decline in Trans-Pacific Imports

During the first eight months of 2023, significant year-over-year drops in imports from Asia have been observed at the major ports located on both the East and West coasts of the United States. This downturn has caused the combined market share of the four busiest US ports for trans-Pacific imports to shrink by 2.7 percentage points. However, amidst this decline, Gulf Coast ports, notably Houston, have only experienced a modest 3.7% drop during the same period.

According to data from PIERS, a sister product of the Journal of Commerce within S&P Global, the total containerized US imports from Asia plummeted by a staggering 21% year-over-year through August. Nevertheless, when compared to the pre-pandemic year of 2019, import volumes remained relatively stable, raising hopes that annual comparisons will turn positive starting in October, with acceleration expected through the end of the year.

Among the top 10 US ports, eight recorded declines of more than 20% in imports from Asia, with only Houston, which saw a 3.7% decrease, and Baltimore, with an impressive 11.9% increase, bucking the trend.

PORTS
Los Angeles-24,4
Long Beach-22,1
NY-NJ-26,4
Savannah-25,4
Houston-3,7
ENSA-25,9
Virginia-20,5
Oakland-23,1
Charleston-20,5
Baltimore11,9

The market dynamics are shifting as well. The four busiest US container ports, namely Los Angeles, Long Beach, New York-New Jersey, and Savannah, accounted for 68.2% of US imports from Asia in the first eight months of 2023. This is down from 70.9% during the same period in 2022 and 70.1% in 2019. Simultaneously, ports on the Gulf Coast, primarily Houston, have been steadily increasing their market share, growing from 4.8% in January through August 2019 to 6.8% in 2022 and 8.6% in 2023. Houston is responding to this growth by expanding its physical capacity and intermodal connections to the Midwest.

The National Retail Federation’s latest forecast suggests that the US import market is poised for a rebound. After a nine-month streak of year-over-year declines, imports are projected to increase by 0.1% in October, with substantial jumps of 10.4% in November and 12% in December. This optimism is shared by Jonathan Gold, the vice president for supply chain and customs policy at the NRF, who believes that retailers are gearing up for a robust holiday shopping season.

On a sequential basis, imports from Asia have been on the rise for six consecutive months since February, reaching 1.49 million TEUs in August, up from a low of 1.08 million TEUs in early 2023. While still down by 13.1% from August 2022, the increase in shipments this peak season will be compared against the low import volumes in the fourth quarter of 2022.

The recent ratification of the West Coast port labor agreement between the ILWU and PMA is expected to provide stability and certainty for retailers. Los Angeles and Long Beach had experienced sharp import declines in 2023 due to the diversion of cargo to other coasts during the 13-month contract negotiations. With the agreement now in place, Southern California ports are confident in their ability to handle peak-season volumes.

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